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Adjustable -Term Financing Of Farm Loans

Author

Listed:
  • Pederson, Glenn D.
  • Duffy, Michael D.
  • Boehlje, Michael
  • Craven, Robert

Abstract

Firm-level simulation is used to analyze farm financial performance with adjustable-rate, adjustable-term, and fixed-rate financing. Adjustable-term financing is accomplished by changing the term of the loan, instead of payment size, when interest rates change. Simulation results indicate that the adjustable-term loan is an innovation which reduces the cash flow destabilizing effects of volatile interest rates.

Suggested Citation

  • Pederson, Glenn D. & Duffy, Michael D. & Boehlje, Michael & Craven, Robert, 1991. "Adjustable -Term Financing Of Farm Loans," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 16(2), pages 1-12, December.
    • Handle: RePEc:ags:wjagec:32601
    DOI: 10.22004/ag.econ.32601
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    References listed on IDEAS

    as
    1. David J. Leatham & Timothy G. Baker, 1988. "Farmers' Choice of Fixed and Adjustable Interest Rate Loans," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 70(4), pages 803-812.
    2. LaDue, Eddy L. & Zook, Gordon A., 1984. "Variable Interest Rates And The Financial Performance Of Dairy Farm Businesses," Northeastern Journal of Agricultural and Resource Economics, Northeastern Agricultural and Resource Economics Association, vol. 13(2), pages 1-9, October.
    3. Tauer, Loren W., 1984. "Graduated Payment Loan Schedules Under Simple Interest," Research Bulletins 184053, Cornell University, Department of Applied Economics and Management.
    4. Moe, Lonn & Thompson, Jerry L., 1984. "Cash Flow Implications Of Fixed Versus Variable Interest Rate Debt Structures," Staff Papers 13470, University of Minnesota, Department of Applied Economics.
    5. Boehlje, Michael & Pederson, Glenn D., 1988. "Farm Finance: The New Issues," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 3(3), pages 1-4.
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    Cited by:

    1. Khatami, Koohyar & Shadbolt, Nicola & Dooley, Anne & Gray, David, 2019. "Pr - New Zealand Dairy Farmers’ Debt Management Strategies," 22nd Congress, Tasmania, Australia, March 3-8, 2019 345895, International Farm Management Association.

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    Keywords

    Agricultural Finance;

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